business essay

Comparative Study Of Organisational Structures Business Essay

Published: 23, March 2015

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Abstract

The following paper is going to put into comparison two public institutions from two different countries, the UK and Romania. Taking into consideration that these countries are primarily different from a political system point of view, the UK is a Constitutional Monarchy (Parliamentary Democracy), and Romania is a Parliamentary Republic, many interesting aspects can be compared and analysed. I have chosen two similar institutions, local city councils, in order to show the difference between them, considering both positive and negative aspects. The reason for this is to try and underline some changes that need to be done in Romanian public institutions by showing how a similar institution is functioning in the UK.

Methodology

The research methodology I have chosen is documentary research. The most important research is the public placement I have undertaken at Islington Council in London (June - July 2010) and at City Council of Timisoara, Romania (September - October 2009). These placements have helped me to better understand how these institutions function and how they are organised. Thus I am able to put into comparison the two organisations and analyse the differences based on my experience and on the documentary research I have done during my placements. I have also conducted face-to-face discussions with various employees in various positions that will also be helpful in the following analysis.

Introduction

Many elements of a structure are clearly visible, such as organizational charts, categorizations such as a partnership or corporation, job descriptions, and various legal documents yet these still fall short of illustrating how an organization is designed. One aspect is to view organizations from a systems level that examines such internal components as division of labor, departmentalization, span of control, and the degree of authority present.

Organizational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management. This structure depends entirely on the organization's objectives and the strategy chosen to achieve them. In a centralized structure, the decision making power is concentrated in the top layer of the management and tight control is exercised over departments and divisions. In a decentralized structure, the decision making power is distributed and the departments and divisions have varying degrees of autonomy.

Public institutions are all organized structures created in society for public affairs. Public institutions within the meaning of bureaucracy that you have today, the only way of organizing social and economic state can meet the challenges of modernity (the large number of population, diversity and complexity of human needs that demand met). What makes a bureaucratic institution effective is the rational character manifested through the four main dimensions:

handling a large number of tasks;

emphasis on quantification;

working in a predictable, standardized way;

emphasis on control of the institutions involved in the system.

In a democratic state they have the following functions:

preparation and adoption of legislative acts;

enforcement of laws;

supervision of enforcement of decisions taken at political level.

A public institution "sells" goods and services which provides facilities such as telecommunications services, electricity, gas and water supply, transportation (rail, air, water), urban public transport, financial services (banks, insurance companies). The objective of a public institution is serving the public interest.

We can present here three administrative models that are particularly relevant and that have developed over time:

WEBER MODEL

GULICK MODEL

LEWIS MODEL

clear rules

manager-subordinate communication stiffness

exaggerated organisation dimension

single-member governing

clearly defined hierarchy

results lead to promotion

rating employees by results

greater attention to coordination, communication and leadership

value for creativity

types of organisations - according to place and objectives

performance manager

term leadership

increased leadership role

organisation provides the structure for the exercise of political power

the institutions determines the changes in the political structure

BUREAUCRATIC

RATIONAL

SCIENTIFIC

Society evolution has imposed more types of administrative systems. If in the bureaucratic system, the employees responded to simple stimuli without making any decisions, today, management is far more important than administration and results than means. Changes initiated in public administration require investments in top technologies, redefining client relationships, work reorganisation, quality management and information campaigns.

Short presentation of the two institutions

4.1. City Council Timisoara

In Romania the City Council is the local public administration authority for coordinating the activities in the city in order to offer the necessary public services. The City Council is made up of city councillors that are elected by universal vote and their number is set according to the number of citizens. The councillors are elected for a period of 4 years. Here are some of the Council's attributions:

The election of a president and 2 vice-presidents;

Has its own internal regulations;

Decides upon the founding or reorganization of institutions, public services that have local interest;

Approves at the proposal of the City Council President, the budget and the way in which it will be used;

Sets the values of local taxes;

Adopts strategies and development programs for different areas such as social, economic and environmental;

Deals with city planning and investment works;

Insures that public services like education, social services, health system, public order are effective and properly working;

The City Council is part of the Local Public Administration Authority and has other local authorities operating under it, some of them being only partially financed by the City Council. The following institutions are completely under the authority of the City Council:

People Registry of Timis County;

Child Protection and Social Assistance Services

Road and Bridges Administration

Economic and Social Development Agency

The institutions that are only partially financed are mostly special education units (for children with special needs), the Military Centre, the County Hospital and the Inspectorate for Emergency Situations.

Organisational Chart of City Council Timisoara:

(Source: http://www.cjtimis.ro/index.php?meniuId=3&viewCat=16&lg=ro)

The internal organisation of the City Council is the following:

Professional Compartments:

Public Relations Service

Regional and European Integration Service

Internal Public Audit Service

Human Resources, Organisation and Pay Roll Service

Logistic Service

Heritage Administration Service

Public Acquisition Service

IT

Budget and Finance Compartment

Executive Director

Finance-Accounting Service

Budget - Income Service

Chief Architect

City Planning Service

Authorizations and Construction Discipline Service

Environment and Unconventional Energy Protection Service

Land Registry and Town Management Service

Investments, Project Management and Public Utilities Monitoring Service

Legal Service

Transparent Decision Making Service

Islington City Council, London

The Council is composed of 48 Councillors elected every four years. Councillors are democratically accountable to residents of their ward. The overriding duty of councillors is to the whole community, but they have a special duty to their constituents, including those who did not vote for them.

Councillors have to agree to follow a code of conduct to ensure high standards in the way they undertake their duties. The Standards Committee is responsible for overseeing training and advising members on the code of conduct and for receiving (and normally dealing with) complaints that a councillor has breached the code.

All councillors meet together as the Council. Meetings of the Council are normally open to the public unless matters are discussed which must be kept confidential. Here councillors decide the Council's overall policies and set the budget each year. The Council appoints the Leader and members of the Executive.

The Executive is the part of the Council, which is responsible for most day-to-day decisions. The Executive is made up of the Leader and a number of Executive members. All key decisions to be made by the Executive will be published in the Executive's Forward Plan in so far as they can be anticipated. Decision making meetings of the Executive will generally be open for the public to attend except where personal or exempt matters are being discussed. The Executive has to make decisions which are in line with the Council's overall policies and budget. If it wishes to make a decision which is not in line with the budget or policy framework, this must be referred to the Council as a whole to decide.

Islington Council is made up of six different departments.

Chief Executive's Team

Communication and Consultation

Strategic Partnership

Equality and Diversity Unit

Performance

Children's Services

Children's Social Care

Young People's Division

Strategy and Commissioning

Building Schools for the Future

Workforce and Organisational Development

Corporate Resources

Legal Services

Electoral Registration

Registration of births, death and marriages

Community Safety

Human resources

Internal IT and network Services

Environment and Regeneration

Greenspace and Leisure

Planning

Public Protection

Regeneration

Public Realm

Finance

Accountancy

Audit

Corporate Finance

Insurance

Housing Benefits

Payroll and Pensions

Procurement

Property Services

Housing and Adult Social Care

Housing

Adult Social Care

Analysis on Organisational Design

For an organizational system to be efficient it is important that it is adequate to the way in which the institution is functioning.

Bureaucratic Organisation is very common in the Romanian Public Administration. This is a system in which every employee has clear responsibilities, there is a strict hierarchical command, usually each employee answers to one supervisor, there are rules and procedures meant to ensure a linear performance, there is very little interest about the employee problems and according to task achievement employees are promoted or dismissed. If analysed, this type of organisation does not use the human resource at its full potential because each employee does only what is asked to do and nothing more, there is no personal initiative and employees are not improved through training programmes. Therefore, employees have career objectives and are usually mediocre.

Functional Organisation is the most popular type of organisation and we can find it in both of the analysed institutions. This type of organisation groups the employees according to their job functions. This type of organisation allows the department leaders to specialize according to their department's profile.

Salman & Storey (2001) describe the structure of an organisation as the pattern of relationships between roles in an organisation and its different parts. They see the purpose of this structure as serving to allocate work and responsibilities in order to direct activities and achieve the organisation's goals. Structure enables managers to plan, direct, organise and control activities of the organisation.

An organisation structure can be defined as the architecture both visible and invisible which connects and weaves together all aspects of an organisation's activities so that it functions as a complete dynamic entity. One simple approach is to consider how an organisation's structure is described. This is often shown in the organisational chart that provides useful insight into the organisation's design.

As with any significant endeavour organizational design begins with consideration of a number of items. Organizational objectives form the foundation as they described the reason the organization exists in the first place. Other design considerations that are just as important as objectives include division of labour, departmentalization, span of control, and the degree of authority present.

The division of labour with respect to organizational design considers how overall tasks that will bring about desired organizational outcomes will be divided into manageable and related activities to be carried out by machines and organizational members. Task specialization in an organization thus focused on finding the most efficient way to perform a task or a given set of tasks. Gibson (2006) stated "the economic advantages of dividing work into specialized jobs are the principal historical reasons for the creation of organizations" and can be based on personal specialties, horizontal specialization, and "along the vertical plane of an organization" (pp. 396-397). Personal specialties are akin to the traditional professional distinctions such as accounting and engineering, horizontal distinctions such as fabrication and distribution, while the vertical plane the hierarchy of supervisors, middle managers, and top management.

While the above are criteria of division of labour an overarching theme is to what degree the tasks need to be specialized. The degree of specialization then depends on the resources available to the organization and the ability of management to effectively provide oversight of the various tasks (Scott, 2003).

Acknowledgements of the different attributes that contribute to one's cultural identity were offered as those that tended toward individualism and those that better reflected collectivism. A team composed of both has a higher likelihood of experiencing negative conflict if not handled properly. It is better to consider the developmental stages of groups with respect to diversity such that efforts can be focused on achieving a relative degree of success in a team environment.

Departmentalization becomes necessary "as the number of specialized jobs in an organization increases" because a single manager is less likely to effectively coordinate activities which leads to a new form of grouping and "a new job is defined - manager of the group' (Gibson, 2006, p. 397). Various means to group include by function, geography, product or service, or some combination of them as one finds in a matrix grouping.

Departmentalization sometimes effectively creates groups that are homogeneous or heterogeneous. Lorsch (1987) said that differentiation, the functional and managerial difference of departments in an organization, and integration, the degree of collaboration among the departments, were key concepts of the structural design (p. 204). Differentiation among the departments was based on the amount of certainty of available information that each department possessed relative to a given product or service.

As the designer moves up the design of an organization from the most basic activities the next iteration of design includes the span of control. Span of control addresses how many levels of management are needed to coordinate the activities of the subunits. Gibson (2006) stated that "the number of potential interpersonal relationships between a manager and subordinates increases geometrically as the number of subordinates increases arithmetically" (p. 402).

Terms typically associated with span of control include tall and flat organizations. Tall organizations tend to have many layers of management and relatively tight connections due to communication needs between the lowest and highest levels of the organization. Tall organizations are characterized by inflexibility and a slow rate of organizational change although they are also quite good at accomplishing objectives as long as the external environment is relatively stable. Flat organizations have relatively few levels of management, place less emphasis on formalization, and tend to have relatively loose connections between subunits. The loose connections allow for more rapid organizational change in flat organizations than tall ones. Scott (2003) felt tall organizations were more characteristic of rational systems while flat organizations were more similar to the open systems view.

Hierarchy in the form of clustering is one more element of span of control and is best described as systems that are composed of subsystems and are themselves subsystems of other larger systems. This tight and dense structure allows subunits to exist as semiautonomous units that enable them to change or evolve as a result of changes in the environment with minimal supervision from the organizational head; something characteristic of a flat organization. However, being semiautonomous does not mean that the units will act in line with overall organizational objectives.

The analysis of these two groups of structures can be correlated. The "sharp" structures are determined by organisational charts with many levels of hierarchy and are specific to the mechanical theory - vertical relationships. The "flat" structures of organisation define organic structures - horizontal relationships.

In order to underline the differences between these structures, I will present a table with a set of unitary criteria according to which a comparative analysis can be done.

Comparative analysis between sharp and flat structures

No.

Comparative Criteria

Sharp structures

Flat structures

1

Managerial activities

Well defined

Adaptable

2

Control level

Centralised

Decentralised

3

Control type

Strongly hierarchical

Participative

4

Type of control

Bureaucratic

Non-bureaucratic

5

Control difficulty

High

Low

6

Employee rotation

Low

High

7

Managers rotation

High

Low

8

External environment dynamics

Low

High

9

Internal environment dynamics

Low

High

10

Motivation - results correlation

Weak

Strong

11

Communication

Formal

Informal

12

Communication channels

Set by rules and procedures

ad-hoc

13

Number of hierarchical levels

High

Low

14

Authority concentration

Strong

Reduced

15

Degree of adaptability

Low

High

16

Types of relationships

Hierarchical

Interpersonal

17

Functionality

Low

High

18

Resource Rationality

Low

High

19

Cooperation

Insufficient

General

20

Promotion opportunities

High

Low

21

Feed-back capacity

Low

High

22

Dominant

Civil Servants

Specialists

23

Specificity

Public Sector

Private Sector

Comparative analysis between mechanical and organic structures

No

Comparative Criteria

Mechanical structures

Organic Structures

1

Degree of flexibility

Low

High

2

Type of communication

Formal

Informal

3

Communication

One way

Two way

4

Communication

Static

Dynamic

5

Coordination

Imposed

Assumed freely

6

Formalisation

High

Low

7

Type of expertise

Official

Professional

8

Subordinates statute

Soldiers

Partners

9

Decision making

Individual hierarchical

Participative

10

Type of Leadership

Task based

Human based

11

Implementing decisions

Difficult

Quick

12

Specialists access

Difficult

Quick

13

Interdependence between individuals

Low

High

14

Interdependence between groups

Low

High

15

Activities

According to the rules

According to the objectives

16

Parallel between activities

Low

Intense

17

Action development

Successive

Fragmented

18

Control

Structured

Impersonal

19

Authority

Concentrated

Dispersed

20

Type of authority

Formal

Non-formal

21

Personal initiative

Not stimulated

Stimulated

According to this analysis we can name a few essential aspects for an organisation:

Strategy;

Environmental adaptability;

Organisational culture;

Leadership.

Timisoara City Council is a sharp and mechanical structure. The organisational chart clearly shows a vertical hierarchy and according to the internal procedures every activity is being done by the book. There are three main categories in the organisation: Professional Compartment, Budget and Finance and Chief Architect Compartment, each of these has a number of departments. This is not a decentralised structure. The managers of each department cannot make any decisions without the prior consent of the President. The hierarchical level is very strong and well defined. The type of control exercised is bureaucratic, thing that makes it even more difficult to have an efficient and effective public service. There is almost no cooperation between the departments, thus no project is discussed at an institutional level so that everybody can provide input and feed-back.

The City Council is, according to the Romanian Public Administration law, a decentralised institution. This means that it has its own budget, and the Councillors are elected by free vote. Unfortunately, this is true only in theory, in reality, the institution is still very much under the political aspect. The exercised control of the political class is mainly through the laws that dictate the functioning system of the public institutions.

Islington Council is a flat, organic structure. First of all its organisation is based on Directorates. The Council is split into six directorates (Chief Executive's Team, Children's Services, Corporate Resources, Environment and Regeneration, Finance and Housing and Adult Social Care), each of them having a Managing Director and a number of departments each having a manager that respond directly to him/her. Each Directorate has implemented "Ways of Working" that defines the rules by which the departments function and how each of the employees needs to do their job. The correlation between motivation and results is very strong due to the fact that there is a Competency Framework that is structured on every level of the organisational structure giving each employee the opportunity to learn and understand what he/she needs to do in order to receive a good appraisal and even be promoted. Islington Council has a small number of hierarchical levels and communication is done easily and two ways, cooperation among the departments is smooth and decisions are taken at a participative level.

Defining a strategy for a sharp structure is done by the higher hierarchical structures. Communication inside such an organisation is more difficult than in the mechanical structure organisation because even if the higher management is very determined, implementing a strategy proves to be difficult due to the fact that the human resources from the bottom of the pyramid, responsible for this process, are poorly informed upon the importance of the strategy. The participative management process are low in number as well as in intensity (quantitative and qualitative), the strategic objectives are not split to an individual level, thus making it difficult to have responsible employees.

The mechanical structure, although it can support strategy implementation by emphasising the specificity of the operations, by a proper work division, it still does not manage to achieve all the necessary criteria. A "line" organisation is useful but difficult to apply in big organisations; a "functional" one must ensure the coherence of specialised units on different hierarchical levels.

In opposition, the flat structures prove to be beneficial for implementing organisational strategy. Having a better communication, a favourable organisational environment and a good capacity to solve problems, these flat structures have the advantage to be using the same human resources to realize the strategy and also for implementing it.

The organic structures are less rigid, they have less hierarchical control and excessive formalisation. This allows them to adapt better and be more flexible and thus easily implement a strategy. This adaptability and flexibility shown by the management represents also a source of motivation for the employees and a means of active involvement of the employees.

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